Discussion
Ozzie Osmond said:
Trommel said:
Ozzie Osmond said:
Yes. Look at land prices. It's blatantly obvious they aren't driven by returns from farming - they are driven by the lifestyle choice of many owners. This skews the whole economics of food production in UK.
Out of all the stupid things you have posted I think that's right up there.http://www.bigpictureagriculture.com/2011/06/compa...
XDA said:
It isn't sustainable, which is why we have fewer diay farms every year.
When you have 10,000-20,000 litres of milk a day to get to market, you have no option but to sell it at a loss. Who else can process that amount of milk 365 days a year?
While milk makes a loss, there's still profits made on crops, sheep, lambs and beef etc.
I guess the market forces point is that eventually supply will drop to meet demand at which point the pricing power returns to the farmers remaining.When you have 10,000-20,000 litres of milk a day to get to market, you have no option but to sell it at a loss. Who else can process that amount of milk 365 days a year?
While milk makes a loss, there's still profits made on crops, sheep, lambs and beef etc.
FWIW I buy from my local farmer who, in the snows of 2009, delivered as usual in the dark through 2 feet of snow, on a 40 year hold tractor, whilst holding a torch as a headlight. Commitment isn't a big enough word.
XDA said:
...
Unless you are producing large volumes of milk, its not worth your while.
If it's all being sold at a loss, I would have thought large volumes were a bigger problem? At a 3p loss per 4pts (think those were the figures earlier on the thread), so broadly 1.5p per litre, that means your scaled farm is losing 300 quid a day - 100k a year! Unless you are producing large volumes of milk, its not worth your while.
That doesn't sound worthwhile to me, or even remotely sustainable. Something must be wrong with the numbers, unless ancillaries like farm shops, crops etc are making them way way over 100k per year? And if they are that lucrative, why wouldn't you dispose of the herd immediately and fully scale those lucrative bits? (Ignoring the farm shop wouldn't have any milk
).MB - how do supermarkets manage to source abroad for the same or less as it is produced here?
Presumably there's a limit to where it can be transported from owing to time. So presumably we're looking at France/Germany/Netherlands? Possibly Poland/Italy/Spain/Scandiwegia? Not places like India/Africa/SAmerica?
Can they really produce it and ship it for less than we can here and, one presumes, make a living out of it?
Is this something to do with EU subsidies? If so why aren't our farms getting them? Or is it something else?
(None of the above meant antagonistically - genuinely interested. Friendly neighbour of mine is a farmer. No longer cow dairy but I think that was down to F&M rather than pure economics. Works harder than anyone I know).
Murph7355 said:
MB - how do supermarkets manage to source abroad for the same or less as it is produced here?
Presumably there's a limit to where it can be transported from owing to time. So presumably we're looking at France/Germany/Netherlands? Possibly Poland/Italy/Spain/Scandiwegia? Not places like India/Africa/SAmerica?
Can they really produce it and ship it for less than we can here and, one presumes, make a living out of it?
Is this something to do with EU subsidies? If so why aren't our farms getting them? Or is it something else?
(None of the above meant antagonistically - genuinely interested. Friendly neighbour of mine is a farmer. No longer cow dairy but I think that was down to F&M rather than pure economics. Works harder than anyone I know).
I'm not suggesting they can source milk for the same or less than they can here, I genuinely don't know. But Italy, the Netherlands, Denmark and Germany (IIRC) are big milk producers so it [/i]could[/i] be sourced there if British farmers tried to make a stand. The point is who would blink first in any standoff between farmers and supermarkets - since as we've established cows still have to be fed and milked and refrigerated containers from Europe are commonplace, it's easy to see who's going to lose out.Presumably there's a limit to where it can be transported from owing to time. So presumably we're looking at France/Germany/Netherlands? Possibly Poland/Italy/Spain/Scandiwegia? Not places like India/Africa/SAmerica?
Can they really produce it and ship it for less than we can here and, one presumes, make a living out of it?
Is this something to do with EU subsidies? If so why aren't our farms getting them? Or is it something else?
(None of the above meant antagonistically - genuinely interested. Friendly neighbour of mine is a farmer. No longer cow dairy but I think that was down to F&M rather than pure economics. Works harder than anyone I know).
The farmers know the supermarkets have them by the short and curlies, they've been competing with one another for the supermarket's business for decades and now they're coming to realise just what sort of power they've unwittingly at first, handed over. But the whole business of agriculture has evolved to serve supermarkets who don't, in my view behave responsibly considering what's at stake is the nation's ability to feed itself.
So really it's more likely to be a question of the farmers undercutting each other and/or not knowing the pricing alternatives that the supermarket has. Rather than the supermarkets having them by the balls...
If milk from Germany would actually cost the supermarket 80p for 4pts, it's down to farmers to know this so that they can call the supermarket's bluff.
If it costs under the 58p, they need to work out why (I'm sure Fritz won't be selling his milch at a loss).
If the reason prices are so low is that neighbouring farms are undercutting each other, that's not the supermarket's fault either. Can't think why this would happen to the point of loss making though...it must, roughly, cost everyone here the same for like for like product. And even if not, unless a small number of farms can furnish all demand, there will still be gaps in the market for people to charge more and hence not make a loss.
If milk from Germany would actually cost the supermarket 80p for 4pts, it's down to farmers to know this so that they can call the supermarket's bluff.
If it costs under the 58p, they need to work out why (I'm sure Fritz won't be selling his milch at a loss).
If the reason prices are so low is that neighbouring farms are undercutting each other, that's not the supermarket's fault either. Can't think why this would happen to the point of loss making though...it must, roughly, cost everyone here the same for like for like product. And even if not, unless a small number of farms can furnish all demand, there will still be gaps in the market for people to charge more and hence not make a loss.
Mark Benson said:
the whole business of agriculture has evolved to serve supermarkets who don't, in my view behave responsibly considering what's at stake is the nation's ability to feed itself.
Yet another PHer looking for the illusory security of protectionism and a planned economy. I don't follow your logic there Murph - farms negotiate prices with processors, who are all under pressure from (or owned by) the supermarkets. All farmers will get somewhere near the same price and are fixed into that contract for a year, regardless of fluctuating feed prices etc.
It's not the farmers undercutting one another - they have no need, we are under quota in the UK now meaning that under CAP rules we are allowed to produce 80% of the country's milk needs, the other 20% coming from elsewhere in the EU but in reality we produce less than 80% thanks to the loss of producers as mentioned previously. As you say, why would you undercut your neighbour so much that you were tied into making a los for the next year? You wouldn't, but if you have a herd of cows and all you are offered is 58p, then you take a small loss to avoid a bigger loss or the loss of your herd hoping that next year you will make a profit to offset this year.
After a while though, farmers are, no matter how long they and their families have been dairy farmers on that piece of land, beginning to realise there is no profit next year, or the year after and giving up the business - which concerns me and it should concern you.
And I'm not saying the supermarkets would enjoy paying more to import milk, I'm saying that if the farmers decided not to deal with the supermarkets and they had to import, they could keep up the importation longer than the farmers could continue without an income while still having to feed and milk their herds.
It's not the farmers undercutting one another - they have no need, we are under quota in the UK now meaning that under CAP rules we are allowed to produce 80% of the country's milk needs, the other 20% coming from elsewhere in the EU but in reality we produce less than 80% thanks to the loss of producers as mentioned previously. As you say, why would you undercut your neighbour so much that you were tied into making a los for the next year? You wouldn't, but if you have a herd of cows and all you are offered is 58p, then you take a small loss to avoid a bigger loss or the loss of your herd hoping that next year you will make a profit to offset this year.
After a while though, farmers are, no matter how long they and their families have been dairy farmers on that piece of land, beginning to realise there is no profit next year, or the year after and giving up the business - which concerns me and it should concern you.
And I'm not saying the supermarkets would enjoy paying more to import milk, I'm saying that if the farmers decided not to deal with the supermarkets and they had to import, they could keep up the importation longer than the farmers could continue without an income while still having to feed and milk their herds.
Ozzie Osmond said:
Mark Benson said:
the whole business of agriculture has evolved to serve supermarkets who don't, in my view behave responsibly considering what's at stake is the nation's ability to feed itself.
Yet another PHer looking for the illusory security of protectionism and a planned economy. XCP said:
eccles said:
What a strange statement. I suspect the vast majority of coal miners etc would still be doing their jobs if they had the choice.
The majority of miners I met couldn't wait to get out of the pit.Mark Benson said:
Ozzie Osmond said:
Mark Benson said:
the whole business of agriculture has evolved to serve supermarkets who don't, in my view behave responsibly considering what's at stake is the nation's ability to feed itself.
Yet another PHer looking for the illusory security of protectionism and a planned economy. Murph7355 said:
XDA said:
...
Unless you are producing large volumes of milk, its not worth your while.
If it's all being sold at a loss, I would have thought large volumes were a bigger problem? At a 3p loss per 4pts (think those were the figures earlier on the thread), so broadly 1.5p per litre, that means your scaled farm is losing 300 quid a day - 100k a year! Unless you are producing large volumes of milk, its not worth your while.
That doesn't sound worthwhile to me, or even remotely sustainable. Something must be wrong with the numbers, unless ancillaries like farm shops, crops etc are making them way way over 100k per year? And if they are that lucrative, why wouldn't you dispose of the herd immediately and fully scale those lucrative bits? (Ignoring the farm shop wouldn't have any milk
).MB - how do supermarkets manage to source abroad for the same or less as it is produced here?
Presumably there's a limit to where it can be transported from owing to time. So presumably we're looking at France/Germany/Netherlands? Possibly Poland/Italy/Spain/Scandiwegia? Not places like India/Africa/SAmerica?
Can they really produce it and ship it for less than we can here and, one presumes, make a living out of it?
Is this something to do with EU subsidies? If so why aren't our farms getting them? Or is it something else?
(None of the above meant antagonistically - genuinely interested. Friendly neighbour of mine is a farmer. No longer cow dairy but I think that was down to F&M rather than pure economics. Works harder than anyone I know).
Ozzie Osmond said:
Mark Benson said:
Ozzie Osmond said:
Mark Benson said:
the whole business of agriculture has evolved to serve supermarkets who don't, in my view behave responsibly considering what's at stake is the nation's ability to feed itself.
Yet another PHer looking for the illusory security of protectionism and a planned economy. But that doesn't make sense.
The supermarkets will only go abroad if the price is lower. Otherwise why bother? I guess they could pay more to EU farmers, hike their prices and blame British farmers. But that would be a very risky strategy!
Ignore the 20% thing (which I'd scrap if I were in power), how much cheaper are Uk farmers than EU ones?
It sounds like the farmer's aren't great at negotiating (individually and collectively). If they have material variable costs and are not accommodating those in their contracts, or a generally sustainable price, then increase the price and get better terms. A supermarket's only choice would be to go to the EU (see above) or not sell milk, or put their own prices up?? All give opportunity to the farmer.
The supermarkets will only go abroad if the price is lower. Otherwise why bother? I guess they could pay more to EU farmers, hike their prices and blame British farmers. But that would be a very risky strategy!
Ignore the 20% thing (which I'd scrap if I were in power), how much cheaper are Uk farmers than EU ones?
It sounds like the farmer's aren't great at negotiating (individually and collectively). If they have material variable costs and are not accommodating those in their contracts, or a generally sustainable price, then increase the price and get better terms. A supermarket's only choice would be to go to the EU (see above) or not sell milk, or put their own prices up?? All give opportunity to the farmer.
Murph7355 said:
But that doesn't make sense.
The supermarkets will only go abroad if the price is lower. Otherwise why bother? I guess they could pay more to EU farmers, hike their prices and blame British farmers. But that would be a very risky strategy!
Ignore the 20% thing (which I'd scrap if I were in power), how much cheaper are Uk farmers than EU ones?
It sounds like the farmer's aren't great at negotiating (individually and collectively). If they have material variable costs and are not accommodating those in their contracts, or a generally sustainable price, then increase the price and get better terms. A supermarket's only choice would be to go to the EU (see above) or not sell milk, or put their own prices up?? All give opportunity to the farmer.
The price is lower because it's subsidised, often we're talking milk powder, but that reduces the demand for local milk too.The supermarkets will only go abroad if the price is lower. Otherwise why bother? I guess they could pay more to EU farmers, hike their prices and blame British farmers. But that would be a very risky strategy!
Ignore the 20% thing (which I'd scrap if I were in power), how much cheaper are Uk farmers than EU ones?
It sounds like the farmer's aren't great at negotiating (individually and collectively). If they have material variable costs and are not accommodating those in their contracts, or a generally sustainable price, then increase the price and get better terms. A supermarket's only choice would be to go to the EU (see above) or not sell milk, or put their own prices up?? All give opportunity to the farmer.
Murph7355 said:
But that doesn't make sense.
The supermarkets will only go abroad if the price is lower. Otherwise why bother? I guess they could pay more to EU farmers, hike their prices and blame British farmers. But that would be a very risky strategy!
Ignore the 20% thing (which I'd scrap if I were in power), how much cheaper are Uk farmers than EU ones?
It sounds like the farmer's aren't great at negotiating (individually and collectively). If they have material variable costs and are not accommodating those in their contracts, or a generally sustainable price, then increase the price and get better terms. A supermarket's only choice would be to go to the EU (see above) or not sell milk, or put their own prices up?? All give opportunity to the farmer.
Your question was - why don't the farmers get tough and refuse to sign contracts, my response to that was - because the supermarkets would simply call their bluff and look abroad and the farmers would likely as not capitulate first.The supermarkets will only go abroad if the price is lower. Otherwise why bother? I guess they could pay more to EU farmers, hike their prices and blame British farmers. But that would be a very risky strategy!
Ignore the 20% thing (which I'd scrap if I were in power), how much cheaper are Uk farmers than EU ones?
It sounds like the farmer's aren't great at negotiating (individually and collectively). If they have material variable costs and are not accommodating those in their contracts, or a generally sustainable price, then increase the price and get better terms. A supermarket's only choice would be to go to the EU (see above) or not sell milk, or put their own prices up?? All give opportunity to the farmer.
I didn't suggest they'd look abroad unless forced to.
my link previously suggested that the NFU is starting to talk tough regarding milk prices and that the farmers are at last beginning to think of more drastic action. When you're up against a wall as they seem to now be, you'll consider what you may recently have never conceived you'd do.
Murph7355 said:
It sounds like the farmer's aren't great at negotiating (individually and collectively). If they have material variable costs and are not accommodating those in their contracts, or a generally sustainable price, then increase the price and get better terms. A supermarket's only choice would be to go to the EU (see above) or not sell milk, or put their own prices up?? All give opportunity to the farmer.
Nothing to do with the farmers ability at negotiating. The milk contracts are often one sided, offer no clarity on price and they are locked into one buyer with long notice periods.When the supermarkets cut the price per litre, there's nothing realistically that the farmer can do about it and the supermarkets know it.
Material prices such as feed and fertiliser are constantly going up.
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